The highest Hingis can possibly finish this year is #3 behind Capriati and Williams (order yet to be decided). However, she is most likely going to finish at #4 seeing as Davenport is just 200 points behind on the Race listing right now and still has three tournaments to play (so she'll make up that 200-300 point deficit easily, and then some).
Yeah, possibly #5 by end of Aussie Open, but it all depends on how quickly she heals from surgery and her subsequent form.
It's going to be weird though seeing Hingis's name lower than 2 in the world! Ever since I started following tennis, which was roundabout the 1997 Australian Open time, she hasn't been lower than 2 (although she was 4 AT the 97 AO, but rose to 2 after the win and never looked back)